Global X ETFs launches pure-play China Tech ETF amid growing client demand
Global X ETFs today announced the launch of the Global X China Tech ETF (ASX: DRGN) – targeting the most innovative technology companies listed in China and Hong Kong.
Global X ETFs Senior Investment Strategist, Billy Leung says China’s technology landscape has been built over decades of industrial development, infrastructure expansion, and digital scaling – resulting in a robust landscape of which spans everything from hardware and platforms to advanced manufacturing.
“Chinese tech companies cannot be underestimated. They aren’t speculative, rather they will be responsible for China’s shift toward self-sufficiency and are critical to the global technology ecosystem,” said Leung.
“China’s technology sector is built on decades of industrial expansion and infrastructure investment. This deep foundation has given rise to a vast innovation ecosystem from manufacturing to automation and AI. With the digital economy projected to exceed 55% of China’s GDP by 2030, we are only beginning to see the transformational impact on productivity across all sectors and help secure the country’s long-term competitiveness.”
DRGN is a passively managed fund with a management fee of 0.45% per annum, tracking the Global X Tech 20 Index – a proprietary index which has been purpose built to deliver pure-play exposure to the Chinese tech sector.
Three of the most recognisable names held in the 20-stock ETF are Tencent (best known for its social media platform, WeChat), BYD (a leading manufacturing company well-known for battery and electric cars), and Alibaba (a multinational technology company specialising in e-commerce and retail).
“DRGN is different from its peers as it avoids state owned entities (SOEs) and financials, therefore it could be an attractive addition to both direct and institutional investors seeking direct, high-conviction allocation to China’s key growth industries without dilution from other markets. It offers exposure to industries such as AI, automation, and semiconductors that are historically underrepresented in existing China-focused ETFs,” said Leung.
China-focused ETFs listed in Australia hold approximately $470 million, while broader Asia-focused ETFs with China exposure manage around $1.9 billion.
“There is significant anticipation for this ETF to hit the local market and we are thrilled to be delivering such a strategic solution to our clients. Given, this demand and success of previous tech-focused ETF launches such as GXAI in 2024, Global X expects DRGN to accumulate around $40 million over its first year of trade.
“This launch is particularly timely as China’s market has been unloved over the last 24 months due to sentiment-driven concerns around regulation, geopolitics, and macro growth. But beneath the surface, earnings visibility is improving, operational momentum is returning, and strategic sectors like AI, EVs, and semiconductors are beginning to scale making this an inflection point for investors focused on fundamentals.”
DRGN now brings Global X’s suite of ETFs to 45 across thematic growth, commodities, income international access, core and digital assets.
